Post on 19-Jan-2023
USAIDMIDAS II PROGRAM
A BREIF FINANCIAL MANAGEMENT EVALUATIONOF GHANA SEED COMPANY (GSC)
CONTRACT NO. 681-0000~I-OO-3156-00
WORK ORDER NO. 8
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT (USAID)MANAGED INPUTS AND DELIVERY OF AGRICULTURE SERVICES
MIDAS II PROGRAMA BRIEF FINANCIAL MANAGEMENT EVALUATION OF
GHANA SEED COMPANY (CSC)
INDEX
SECTION I
SECTION II
SECTION III
SECTION IV
SECTION V
SECTION VI
SECTION VII
INTRODUCTION
SUMMARY OF PRINCIPAL CONCLUSIONS
SUMMARY OF OUR KEY RECOMMENDATIONS ANDSUGGESTED REMEDIAL MEASURES
OUR APPROACH TO THE EVALUATION
THE EXISTING REORGANIZATION FRAMEWORK
OWNERSHIP AND SUPERVISING STRUCTURE- ORGANIZATION CHART
FINANCIAL MANAGEMENT STRUCTURE
FINANCIAL HISTORY OF GSC AND STATUS OFFINANCIAL STANDING
SOURCES OF FUNDSBUDGETARY CONTROL AND PROFITABILITYPROPERTY, PLANT AND EQUIPMENT (FIXEDASSETS)INVENTORY
- REVENUES AND EXPENDITURES
- UTILIZATION OF FINANCIAL REPORTS BYMANAGEMENT AND QUALITY OF RELATEDMANAGEMENT DECISIONS AND CAPABILITIES.
APPENDICES ATTACHED TO THIS REPORT
PAGEREFERENCE
1 - 3
4 - 5
6 - 8
9 - 10
11 - 17
18 - 25
26 - 27
APPENDIX I STATEMENT OF WORK - USAID WORK ORDER ATTACHMENT NO. 1
APPENDIX II EXISTING ORGANISATION CHART
APPENDIX III COpy OF REQUEST FOR INFORMATION SUBMITTED TO MANAGEMENT
APPENDIX IV SUMMARY OF SEED PRUCHASES AND SALES
APPENDIX V SUMMARY OF GSC PRODUCED PROFIT AND LOSS STATEMENTS ANDBUDGET ESTIMATES.
APPENDIX VI· - RECONSTRUCTED FINANCIAL POSITION, SOURCES AND USESOF DONOR FUNDS AND GRAPHIC REPRESENTATION OF TRENDS.
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Mrs. Mary ReynoldsREDSO/WCSc/o American Embassy01 BO 1712 Abidjan 01Ivory Coast
Dear Madam:
PROVIDENCE BUILDING197 ASHMUN STREET
P. O. BOX 2085MONROVIA, LIBERIAT~ephone:224755/223129
Telex: 4462
1.1 We are pleased to submit our final report on the financial
management evaluation of the Ghana Seed Company (GSC),
pursuant to USAID's work order number 642-0102-3-10043
under the MIDAS II Program. A copy of the relevant section
of the work order outlining the statement of work is repro
duced and attached to this report as Appendix I. In view
of the fundamental nature of this evaluation, we have felt
free in this report to refer to the combination of the
company.and its activities as a "project".
1.2 It is our understanding that interests have been expressed
in continuing to support the activities of the Ghana Seed
Company either as a private sector project or, if possible,
to strengthen and streamline management in a reorganization
effort. Weare also aware that our work is to constitute a
financial component input into a more comprehensive review
and evaluation of the need and form of any continued support
to be extended to this seed development and multiplication
project. Accordingly, the objectives of the review can be
summarized as three-fold:
a) Financial viability of the project which as we understand
it, must necessarily be carried out independently of the
structure and capability of the existing management of
the company;
A MEMBER FIRM OF PRICE WATERHOUSE AFRICA AND PRICE WATERHOUSE WORLD FIRM
2
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b) Options for changes in existing organizational structure
including ownership structure, and
c) The extent of the project's dependence on external
resources including Government subventions and
borrowing guarantees.
1.3 We have described our approach and basic procedures adopted in
this evaluation in Section IV of this report. The principal
conclusions arrived at are however summarized in Section II
while our recommendations arising from the conclusions are
separately outlined as Section III. Perhaps Sections I to
III can be considered the Executive Summary Part of this
report. At the end of each conclusion and recommendation,
we have provided references to sections of the report where a
more detailed description of the various matters can be found.
These detailed sections comprise sections V through VII of the
main body of the report together with the appendices. Most of
our findings from this review were discussed during a debriefing
meeting with the USAID Mission in Accra on Saturday, November 16,
1985.
1.4 In Section V we have reported on our evaluation of organiza
tional matters and overviews of the existing management
structure. Although this may not be central to our statement
of work, we nevertheless considered it necessary as a background
against which to relate management capabilities and the budge
tary control functions. A copy of the existing organization
chart is attached as Appendix II. Our comments on the
financial history of the Ghana Seed Company and the resulting
financial position in which the company currently finds itself
are described in Section VI.
This is considered the main body of our report on findings and
is supplemented to a large extent by Appendices IV to VI which
together encompasses our reconstructed financial positions and
annual changes thereto.
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1.5 It is relevant to note the considerable qualifications and
exceptions that have been provided as footnotes to the
schedules on the financial history of the company. It is
our opinion that the fundamental nature of these exceptions
and departures cast such doubts on the figures as to reduce
their usefulness as potential decision making tools. Conse
quently, even with enhanced management capabilities coupled
with the best will to utilize financial reports, it is
unlikely that informed decisions could have been easily madewith these figures. We have also observed even more fundamental lapses in the decision making process itself to warranta linkage of inadequacies in management capabilities to the
gaps in the financial information made available. We havetherefore described this state of affairs in detail in
Section VII of the report.
1.6 It has been our preoccupation in presenting this report to be
as concise as possible without the loss of depth. Ourobjective for preferring this approach is the overriding needfelt by our team to underscore the deep-rooted nature of the
problems. It has been very tempting for us to come out witha litany of wrongs and possible solutions to the financialaccounting and management problems. We hope and trust that
by deliberately avoiding lengthy discussion, we are assistingto bring the key areas of action required intb greater focus.
1.7 Finally, we wish to take this opportunity to acknowledge theco-operation we have received from your Mission in Accra, in
particular the Mission Director, Mr. William Lefes, and also
from officials of the Ghana Seed Company in carrying out thisexercise. We look forward to continued cordial working
relationship with you and REDSO/WCA.
Yours·truly,
SECTION II
4
SUMMARY OF PRINCIPAL CONCLUSIONS
2.1 In this section we proivde the main conclusions arising fromthis brief evaluation. We wish to point out that none ofthese matters standing by themselves can adequately conveythe generally overwhelming picture of disarray in financial'management and the apparent neglect by the various levelsof supervisory authority over the company's affairs includingthe Agencies of Government, the Board of Directors and seniormanagement.
2.2 THE OPERATIONS OF THE COMPANY HAVE NOT BEEN CARRIED OUT INACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES CODE OFGHANA;. WE SAW NO EVIDENCE THAT ANNUAL GENERAL MEETINGS HAVEEVER BEEN HELD, ANNUAL RETURNS DO NOT APPEAR TO HAVE EVERBEEN FILED ETC. THE PRESENT REOGANISATIONAL STRUCTURE DOESNOT, IN OUR OPINION, CLEARLY DEFINE LINE AND STAFF AUTHORITYFOR DELEGATION OF RESPONSIBILITY AND FOR REPORTING AND MONITORING THE RESULTS OF THE EXERCISING OF THESE RESPONSIBILITIES. Paragraphs 5.1 to 5.8
2.3 THE BASIC ACCOUNTING RECORDS MAINTAINED AND THE RELATEDPRACTICES ADOPTED COULD NOT BE EXPECTED TO SAFEGUARD THECOMPANY'S ASSETS FROM LOSS. NO REGISTER WAS KEPT TORECORD THE FIXED ASSETS OF THE COMPANY, NEITHER WERE WEPRESENTED WITH ANY ACCOUNTING POLICY STATEMENT ON SUCHKEY AND FUNDAMENTAL ISSUES AS DEPRECIATION OF ASSETS,PHYSICAL VERIFICATIONS, RECOGNITION OF INVENTORY LOSSES,OBSOLESCENCE, RECOVERABILITY OF RECEIVABLES, ETC. IN THEABSENCE OF THESE GUIDELINES WE ESTIMATE THAT TOTAL INVESTMENT IN THE COMPANY OF APPROXIMATELY ¢140M, AT DECEMBER1984 (COMPRISING ¢77M IN GHANA GOVERNMENT FUNDS ¢37M INGOVERNMENT GUARANTEED BANK BORROWING AND ¢26M OF USAIDFUNDING)· MAY HAVE BEEN COMPLETELY'LOST BUT NOT RECOGNISEDAS SUCH BY THE ACCOUNTING SYSTEM. Paragraphs 6.1 to 6.3
5
2.4 THE CURRENT MARKETING SYSTEM ADOPTED BY THE COMPANY MEANSTHAT IN PRACTICE LICENSED SEED GROWERS ARE IN COMPETITIONWITH GSC AND ONLY SELL TO THE COMPANY WHAT THEY ARE UNABLETO SELL DIRECTLY TO FARMERS. WE SAW NO EVIDENCE OF MANAGEMENT EFFORT TO RESOLVE THIS IMPORTANT WEAKNESS. Paragraphs6.4 to 6.15.
2.5 THERE WERE NO PROPER CO-ORDINATION AND CONTROLS OVER REVENUESAND EXPENDITURES BY EACH AREA ORGANISATION OR DEPARTMENTS OFTHE COMPANY. NO CREDIBLE MANAGEMENT ACCOUNTING SYSTEM HASEVER BEEN IMPLEMENTED AT GHANA SEED COMPANY AND HALF-HEARTEDATTEMPTS AT BUDGETARY CONTROLS WERE WOEFULLY INADEQUATE ASNO REPORTS ON VARIANCES AND DEPARTURES FROM ESTIMATES WEREMADE AVAILABLE TO US. THE RESULT WAS WHILST EXPENDITURESESCALATED OUT OF CONTROL, LOSS OF REVENUE THROUGH LESS THANIMAGINATIVE TRADING ACTIVITIES WAS ON THE INCREASE. IN SHORTSINCE 1982 THE COMPANY HAS BEEN LOSING MONEY THROUGH BOTHENDS, IE IT LOSSES BOTH IN TERMS OF REVENUES AND EXPENDITURES.Paragraphs 6.16 to 6.25.
SECTION III
6
SUMMARY OF OUR KEY RECOMMENDATIONS ANDSUGGESTED REMEDIAL MEASURES
3.1 It is our understanding that one aspect of the best possible
solutions to the problems of Ghana Seed Company is to priva
tize the project. We also understand that this divestment
of the Government participation in equity may be only partial,
leading to a minority holding by the State. It is obvious
therefore that the future management structure of the company
will depend on any changes in its ownership status. Our
review did not cover the impact of any such changes in share
ownership as this is outside the scope of our statement of
work. Our recommendations are accordingly limited to the
scenario where Government continues to hold either all the
shares or a substantial majority interest in the company.
3.2 We recommend that as a form of organization, the concept of
introducing a limited liability company to carry out the
activities envisaged under the seed multiplication project
should be maintained. However in view of the unsatisfactory
track record of the existing company, we suggest that a
separate company should be registered to be called, for
example, Ghana Seed Company (1986) Limited. Only those
aspects of the physical and human resources of the existing
company considered acceptable should be taken over by the
new company. Paragraphs 5.2 to 5.5.
3.3 While the functions and objectives of the company could
remain the same, the methods to be adopted in achieving
these objectives should be thoroughly reviewed. We have
considered three key possible alternatives:
a) No changes are made to the existing functions and
marketing strategy;
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b) Reducing the functions and limiting these to a mere
seed storage and warehousing activity; and
c) Continue as seed development and marketing company
but sell to licensed seed growers for cash and not
in exchange for seed, consequently acting as whole
salers and not seed-retailers to end users.
We recommend the adoption of alternative (c) as a more pragma
tic solution. This way control over licensed seed growers
should be limited to selling foundation seeds to them for cash
and institute quality control over their output but they
should feel free to sell their products without coming through
GSC. Paragraphs 6.4 to 6.8.
3.4 A central component of the re-organization effort should involve
a new organization structure, more responsive to the needs of
senior management. Complete job evaluation study has to be
carried out resulting in written job descriptions for each key
position. We recommend that both the Chief Accountant and
the Chief Internal Auditor positions should be filled by
professionally qualified and suitably experienced individuals.
Paragraphs 5.6 to 5.8.
3.5 The existing system of accounting needs to be completely
overhauled and accounting procedures manual .written and
fully implemented. The manual should spell out accounting
policies and other practice guidelines on budgetary controls,
inventory pricing and obsolescence, depreciation and fixed
assets register, recognition of receivables doubtful of
recovery, etc. Paragraphs 5.9 to 5.11.
3.6 A technical audit of all existing fixed assets and facilities
to assess their present status should be carried out and we
suggest that this work should be done in conjunction with
the introduction of a properly referenced fixed assets
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register and fair market valuation placed on each item. It
is hoped that this technical review will also result in
improved functioning of the storage and preservation facili
ties and seed developing techniques. As in the case of the
fixed assets register, the assessment of storage facilities
and seed developing techniques will help the introduction of
a proper costing system for each seed variety. Paragraphs
5.11, 6.11 to 6.13.
3.7 Following a re-organization of the company, a system of
performance bonus related to the results of the operation
should be considered and implemented. We suggest that
this incentive scheme should be drawn up in such a way that
it will not be necessary for the Chief Executive and senior
members of staff to privately engage in seed growing in
competion with the company. Paragraph 7.4.
SECTION IV
9
OUR APPROACH TO THE EVALUATION
4.1 Our evaluation work took 10 working days and commenced on
Monday, November 4, 1985. Following an initial briefing
meeting with Mr. William Lefes, USAID Mission Director in
Accra we reviewed in some detail the comprehensive report
prepared by Mr. Guy Hill on the study of the problems of
Ghana Seed Company; September 1985. We then held various
discussions with the Chief Executive and other senior
members of staff of the Ghana Seed Company, particularly
the Chief Accountant and the Financial Accountant.
4.2 We ascertained the status of the annual audited financial
statements and obtained copies covering the period to
December 1983, the latest date to which such annual state
ments have been audited by the company's external independent
accountants. We also obtained draft financial statements
for the year to December 31, 1984. We enquired into the
status of management financial report and budgetary control
statements and were made to understand that apart from the
annual financial statements, the only other information made
available to management was a quarterly summary of receipts
and disbursements. This summary did not take into account
accruals, commitments and payments in advance, hence were
found this to be largely meaningless on close preliminary
scrutiny.
4.3 We carried out a brief review of the internal audit function
and reviewed minutes of Board of Directors meetings. We
noted that several of the Board Meetings were not covered by
formal minutes and we could not sight any reports prepared
and submitted to management by the Internal Audit Department.
10
4.4 All information and documentation submitted to us were
thoroughly reviewed and a brief analysis carried out. This
resulted in our presenting a formal memorandum to management
listing details of items we would need to further understand
the financial functions of the company. A copy of this
memorandum is attached to this report as Appendix III.
4.5 Whilst our terms of reference called for a review based on
existing accounting information, it became obvious to us
from the onset that no great reliance could be placed on
some of the documents submitted to us without qur carrying
out a limited audit and verification work. For example,
we had to visit the Ministry of Agriculture and also the
Ministry of Finance and Economic Planning to ascertain the
extent to which Government of Ghana has been providing
resources to the Ghana Seed Company. We also agreed USAID
support funds to the company's records.
4.6 We did not visit any of the company's area offices outside
Accra as it was obvious to us that not much activity was
going on in these areas and no reliable records are
maintained in the area offices. Also, during our recon
struction of the balance sheets and sources and uses of
funds we did not consider it necessary to translate the
figures into US dollars because we believe the result
would have been misleading. In this report therefore,
except w~ere otherwise stated, all the money values have
been expressed in Ghanaian Cedis.
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SECTION V - THE EXISTING ORGANISATIONAL FRAMEWORK
The Company - Its ownership and supervising structure
5.1 The Ghana Seed Company was incorporated on May 2, 1979 under
the Companies Code, 1963 Act 179 with a stated capital of
¢2000. It obtained a certificate to commence business on
June 21, 1979. All the shares were and continue to be
wholly owned by the Government of Ghana. The company was
to take over the activities previously carried out by the
Seed Multiplication Unit of the Ministry of Agriculture.
5.2 The objectives of the company consisted, in the main, of two
distinct activities:
a) To develop seeds by carrying out research and establishing
farms for the production of seeds, planting materials and
feed as by-products;
b) To make its products available to farmers on a country
wide basis in order to meet the requirements of modern
agriculture in Ghana.
5.3 To achieve these objectives, the Government appoints three
separate levels of supervising structure, one of which is
mainly of advisory nature. Overall authority to monitor
the activities of the company, set policies and guidelines
etc. is vested by the Government in the Board of Directors,
members of which it appoints. The membership of the Board
changes from time to time. On a day to day basis, the
company is to be managed by a Managing Director, who as
Chief Executive reports directly to the Board of Directors.
12
He is also appointed by the Government and in. our analysis,
represents the second level of authority representing the
shareholders. A third level of supervising authority is
in practice of advisory nature only and consists of two
entities which are expected to co-ordinate roles with the
Ghana Seed Company. These entities are the National Seed
Committee and the Ghana Seed Inspection Unit.
5.4 We see no major deficiencies in the current structure of
supervision installed over the project. We consider this
to be in line with most state enterprises and as long as
the company continues to be state-owned or substantially so,
this arrangement will continue to be in order. However,
we consider the stated capital of ¢2,OOO as mentioned in
paragraph 5.1 above to be unrealistic and accordingly in
our reconstructed balance sheets attached under Appendix
VI, the initial Government subventions to the company
amounting to $18,827,576 have been added to the capital of
the company.
5.5 Under the Companies Code of Ghana, several regulations apply
to limited liability companies. These include the following:
a) Financial statements must comply with the fourth
schedule of the Code.
b) Annual General Meetings are to be held annually and
c) Annual returns of the company to be filed and changes
of directors should be registered on Form 17, under
the Code.
We saw no evidence of the Ghana Seed Company complying with
these provisions. In addition, although the company has
been making losses since 1982, we did not see that these
losses have been claimed for tax purposes as no tax returns
have apparently ever been filed. This is again contrary
13
to prov~s~ons of the tax regulations of Ghana. In conclusion,
we believe that perhaps one possible solution is to set up a
new company, say Ghana Seed Company (1986) Limited to take
over the assets of the existing company and be given a fresh
mandate and a new lease of life.
The Company Its organisation structure
5.6 The actual management team of the company responsible to the
Managing Director consists of two levels. The first level
is occupied by the General Manager Operations, who in practice
functions as the Deputy Managing Director. The second level
consists of the departments, six of which report to the General
Manager Operations. These six departments are Production,
Quality Control, Processing, Transport and Mechanization,
Sales and Area Management. The Internal Audit, Accoun~,
Public Relations and General Administration departments are
all expected to report directly to the Managing Director.
There are six operating areas spread across the country.
5.7 On a geographic basis, the Area Managers have line responsi
bility for five sub-departments in each Area. The Accra
Area however falls under the Head Office. These five sub
departments cover the functions of Production, Processing,
Quality Control, Sales and Accounting and are designated
Assistant Managers since they all have functional responsi
bilities to departmental managers in Head Office. A copy
of the present structure is attached as Appendix II. We
consider that the existing structure is cumbersome and
control over management of the Areas appears remote and
ineffective. In short, too much distance has been placed
between the Managing Director and Area Management.
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5.8 In order to engender effective control over the six departments
currently under the General Manager Operations, we believe the
span of control needs to be reduced. Also, we do consider
that the Public Relations Officer and the Administrative
Manager should not be at the same level as the Controller or
Chief Accountant, even if these two positions have to be
retained in the organisation. This also applies to the
position of a Sales Manager based in Accra. We have submitted
a suggested organisation structure on Page 18. We would add
that we do not consider this suggested format to be prescrip
tive since our review has been of a limited nature; but rather
this structure should be considered as a base to which improve
ments can be made after a detailed study. This is because
our terms of reference does not cover the development of an
organisation chart, certainly not outside the finance function.
Accordingly, it may be felt for example that our suggested
structure will cause an element of duplication of duty between
the Operations Manager and the two Area Managers. These
details should be looked into by a more technical review of
the structure. However we consider that the introduction of
a separate department on Farmer education and training is
vital if the objectives of the Ghana Seed Company are to be
achieved.
The Company - Financial Management Structure
5.9 The Accounting Department at Ghana Seed Company consists of
a Chief Accountant, a Financial Accountant and one Accounts
Clerk. The Internal Auditor is in a separate department
and reports to the Managing Director. There is no management
accounting function at GSC hence it is not surprising that no
formal budgets are prepared and no detailed costing of seed
inventory is carried out. The existing occupants of the
positions of Chief Accountant and Internal Auditor are both
not· professionally qualified individuals.
5.10
5.11
15
The only information (apart from annual financial statements)
provided to Management by the accounting department is a
quarterly report on receipts and disbursements. Our review
of this report revealed serious lapsed in its compilation as
it is based on actu~l outlay rather than on expenditure
incurred by the company. In other words, if in a whole
quarter no payments are made because of insufficient funds,
in theory this report will indicate nil purchases while in
practice goods could have been purchased and delivered and
services incurred on behalf of the company. In the circum
stances it has not been practical for management decisions
to be made with the benefit of current and relevant data,
neither does management appear to be aware of what to expect
from the finance function of a company.
We were unable to sign any reports by the Internal Audit
Department. The result is that very little control isexercised on the finance function particularly at the Area
level. Credit control over sales are not strictly enforced
and Area management staff are, at present, in a position to
commit the company by purchasing seeds on credit without theknowledge of Head" Office personnel. We believe that GSC is
in a desperate need of an accounting procedures manual.
This manual should be as detailed as possible but not
necessarily voluminous. The implementation of any manual
should be accompanied by desk-top instructions handbook for
all relevant operatives. The manual should also contain
instructions for determining the unit cost and therefore theprofitability of each seed crop variety and on a farm to farm
basis. These cost/profitability statements are pre-requisitesfor any effective management of the company.
- 16 -GHANA SEED COMPANY (1986)'LIMITED
POSSIBLE ORGANISATION STRUCTURE
BOARD OFDIRECTORS
.5--
I
AREA MANAGERSOUTHERN
IBUDGETS
&MANAGEMENT
'ACCOUNTANT
I
AREA HANAGERNORTHERN
FINANCIALACCOUNTANT
&SECRETARY
MANAGINGDIRECTOR,
I
CONTROLLERFINANCE & ADMIN.
II
GEN. ADHIN.&
PERSONNEL
I
MANAGERPLANNING & RESEARCH
I
CHIEF INTERNALAUDITOR
I
MANAGEROPERATIONS
I 1 1 IFARMER
EDU~ATION
,STATISTICS& STRATEGICPLANNING
RESEARCHDEPT.
'DEVELOPMENTDEPT.
f I IQUALITYCONTROL
MAINTENANCE _.& ENGINEERING'
SERVICES '.PROCESSING
. DEPT.PRODUCTION
DEPT.
17
GHANA SEED COMPANY LIMITEDSUMMARY OF SEED INVENTORY MOVEMENT
Six months Year to Year toYear to Year to Year to to30/6/80 30/6/81 30/6/82 31/12/82 31/12/83 31/12/84
¢OOO ¢OOO ¢OOO ¢OOO ¢OOO ¢OOO
Opening inventory 936 5,486 2,684 11,600 50,417
Purchases 1,949 9,950 10,025 7,278 53,352 19,509
1,949 10,886 15,511 9,962 64,952 69,926
Sales (derived) cost (1,013) (5,400) (12,827) 1,638 (14,535) (43,467)
Closing inventory 936 5,486 2,684 11,600 50,417 26,459
Percentage to totalinventories 60% 60/0 44% 82% 94/0 87/0
COMMENTS:
Seed inventory form a material portion of the inventories held over the years. Seed inventory wastherefore selected for scrutiny and the following came to light.
1. Lack of costing system to ensure proper valuation of inventories
a) That foundation seeds produced were included in closing inventory at the cost of pruchasingcertified seed from seed growers. The absence of a costing system has resulted in thecompany's inability to establish the cost of production of foundation seeds and subsequentlyno separate accounting for this cost centre is carried out.
2. Lack of inventory control procedures and storage facilities
In view of the fact that seed have had to be sold below purchase price (especially in 1984 and1985 up to 15th September, it is obvious that management has not established' any inventorycontrol procedures. There was reference·to the availability of storage facilities to ensurethat seed inventories are safeguarded against the loss of gem quality seed and consequentlyhaving to sell them for feed or food as appropriate.
SECTION VI
18
FINANCIAL HISTORY OF GHANA SEED COMPANY ANDITS FINANCIAL STANDING.
Sources of Funds
6.1 As set out in Appendix VIb, total resources made available tothe company from inception to December 31, 1984 amounted to
¢103,038,713. ¢26,051,489 of this amount was contributed byUSAID and ¢460,680 in FAD funds. In addition to this the
Government of Ghana has guaranteed a line of credit from a
local commercial bank for the company. At December 31, 1984,
¢36,942,664 of this facility had been used bringing the totalfunding of the company to ¢139,981,377 as at that date.
During 1985 the Government of Ghana spent a further ¢32,444,116
on buildings and equipment but this had not been recorded in
the books at the time of our visit. In total by the end of
this year over ¢170 million will have been committed to the
project without any obvious benefit in seed being multipliedor made available to farmers.
6.2 In order to satisfy ourselves as to the reliability of these
figures we have agreed contributions by USAID records. Wealso reviewed in detail records maintained by the Ministries
of Agriculture and Finance and Economic Planning. We notedthat Government subventions in the form of buildings and
machinery amounting to ¢23,810,238 in 1984 had not been
recorded in the books of the company. Also as stated above
another contribution of ¢32,444,116 was not recorded. Wereceived no satisfactory explanation as to why these amounts
were omitted from the company's records. The total contri
bution stated in paragraph 6.1 above incorporates theseomissions by the company.
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6.3 In view of the fact that the company's policy of depreciation
is not clear coupled with the fact that there are several
shortcomings in the accounting for inventories and receivables,
we consider that the accumulated deficit recorded by the
company is in fact worse in reality. Accordingly, we believe
that the total contribution as at December 31, 1984 of
approximately ~140m may have been completely lost. What is
worse, we saw no evidence that additional input of funds into
this company as presently constituted and managed will assist
in reversing the current trend.
Budgetary Control and Profitability
6.4 The company has been badly organised and allowed to run without
any real direction. No-one has tried to make it a viable
operation because the Government of Ghana has treated it as an
agricultural extension service and insisted on controlling the
price of seed. However, it would appear that if full control
over the company's operations was established and the running
costs and seed costs were reduced by 50% then the company would
be at a break-even point.
6.5 It may be possible to reduce costs by more than 50% but it is
difficult to make an accurate prediction without a very
detailed examination of the activities of the staff and their
respective capabilities. The company has not been able to
sell all the seed which it purchases/grows for a variety of
reasons. The main fault has been buying in more seed than it
has the storage capacity to handle, with the result that seed
has gone bad to the extent of approximately 80/90%. We are
not in a position to say if all the seed could have been sold
if it had been kept in good condition but it is safe to assume
that the company could have sold at least twice as much thereby
doubling its income.
20
6.6 We noted that the company gives foundation seed to the licensed
growers but does not ask them to pay at that stage. The
growers are expected to sell back the seed, which they produce,
to the company and set this off against the cost of foundation
seed. From the records it would appear that the growers donot return all the seed and many of them are carried forward
as receivable from one year to the next. Unfortunately, the
company's records are not well maintained in this area so it
was not easy to calculate trends but it would appear that the
turnover in growers is in the region of 62% each year. Those
that remain on the records do not settle their accounts
quickly, if at all, thereby creating the impression that they
are not doing business with the company.
6.7 We have not been able to ascertain how much of the seed
produced by the growers is sold to the ·Company and how muchthey sell direct to the farmers. As they produce from the
foundation seed, it means they are able to sell first on the
market, leaving the company to sell to the market the seed
growers cannot satisfy directly. This may have had an
adverse effect on the company's sales since, in other words,
the licensed seed growers are in direct competition with the
company.
6.8 There is little chance that the company can ever be really
viable in a commercial sense if the Ghana Government keeps
the price of seed under control and below the market value.
However, if controls are to be lifted, one other solution
to privatisation is to make shares available to the farming
community as this may engender greater interest and support
from the farming community.
6.9 We have not been able to determine what effect the new Winneba
plant will have on the quality of seeds produced or on their
shelf life. If seeds could be produced which would keep their
original quality for a longer period then this would go a long
way in solving some of the company's marketing problems.
6.10
6.11
6.12
6.13
21
We did not see any reports from the Internal Auditor during
our examination of the records and it would appear that he is
not performing any useful function at present. There is no
pre-audit of expenditure nor is there any attempt to check
that expenditure is necessary before it is made. No attempt
has been made to establish cost centres or any meaningful
control system to ensure that spending limits are adhered to.
Property, Plant and Equipment
The total value of property, plant and equipment acquired by
the company since its inception is calculated to be ¢58,976,955
including amounts previously omitted as mentioned above. We
observed that no fixed assets register has ever been maintained
and since 1980 when an independent survey was carried out on
assets, no listing of assets in use has been produced.
In view of the fact that no physical inspection of assets
appears to have, been carried out since 1980, we are not able
to comment on the value of property, plant and equipment shown
in the books as at December 1984. In addition there was no
planned maintenance program and it is doubtful if most of these
assets, other than the buildings, are still in active use at
the time of our review. As pointed out elsewhere there was no
credible depreciation policy and consequently the amount of
depreciation shown in the books has been ignored.
It is important to point out once again that in the current year
ending December 31, 1985, the Government of Ghana has already
spent ¢32,444,116 as subventions towards the completion of the:
a)
b)
c)
Seed Processing Plant
Head Office Building
Farm Machinery & Equipment
¢22,278,029
8,259,281
1,906,806
¢32,444,116
22
Inventories
6.14
6.15
Our review of seed inventories and sales prices revealed that
there was inadequate storage facilities to ensure that the
gem quality of seed inventories were not lost and that seed
inventories were properly protected from damage. Subsequently,
large quantities of maize in 1984, for example, were downgraded
and sold as animal feed or food for human consumption, as
appropriate, at prices far below their purchase prices.
Closing inventories were stated at cost (1983) although it was
apparent that majority of these could not be sold for seed in
1984 and therefore the costs at which they were stated were not
realisable in the ordinary course of business. No provisions
for damaged and/or obsolete inventories have been made in
accordance with the requirements of the Companies Code and
internationally acceptable principles. There are apparently
no inventory control system in operation. A copy of the
summary of seed inventory movement is attached as Page 19.
Revenues and Expenditure
6.16 In order to establish the extent to which a meaningful review
of revenues and expenditures could be carried out by reference
to existing data and work done by the company's staff, we
ascertained from the Chief Accountant whether budgets were
prepared based on corporate objectives or targets and whether
these were compared with actual results and explanations
obtained for significant variances. We were made to under
stand that no such system has ever been operated in the
company. We were however provided with a summary of estimates
of revenues and expenditures for the years ended June 30, 1982,
December 31, 1983, 1984 and 1985; a document which is an attach
ment to a letter dated September 12, 1985 addressed to the PNDC
Secretary for Agriculture, on the subject of the need for a
revolving fund scheme.
6 ..17
6.18
6.19
23
There are no clearly defined basis for the preparation·of
revenues and expenditure estimates. Also there appears to
be no follow up to these and no explanation for the variances
between these estimates and the actual figures for the respec
tive years. No amendments were made to the 1983 estimates
following the devaluation, rendering the entire budget
exercise meaningless.
The general trend indicates that expenditure has been on the
increase over the years; this point is clearly illustrated
in a graphic presentation of the expenditure and gross
profit/loss data, Appendix VI.
Our detailed review of expenditure placed emphasis on the
extent to which management had control over spending. The
following represent examples of expenditure which in our
view are controllable.
ix DRAFTYear Year Year rronths Yearto to to to to
June 30 June 30 June 30 Dec 31 Dec 311980 1981 1982 1982 1984
Vehicle nmning&maintenance 162 1,085 2,050 1,172 3,778 5,084
Travelling &transport 149 402 712 413 975 1,579
Salaries &wages 2,247 3,415 5,626 3,028 7,667 9,666
Staff medicalexpenses 11 65 48 166 346
Bank overdraftinterest 391 3,408
Conference &seminars 8 4 95 60 57 177
- 24 -
6.20 There appears to be no attempt, during the period under review,
to exercise control over these expenditures. This stems from
the fact that in the case of vehicle running costs for example,
no records were kept in respect of movement of vehicles and
related gasoline consumption, planned maintenance and condition
of vehicles. This information would have facilitated effective
control to be exercised by management. Secondly, the company
did not have qualified staff to run a routine maintenance
program, hence resorting to outside garages when the vehicles
break down unexpectedly. Also this led to the excessive use
of public transport at excessive cost to the company.
6.21 Cost for conferences and seminars had excalated over the past
five years. This iem is completely controllable by management
and can usually be eliminated during a period of liquiditycrisis without affecting the overall company operations. It
appears that management has taken few, if any, steps to bring
these costs under control.
6.22 Our review of revenues revealed that the main sources of revenue
for the company, over the years, were profits from trading
activities in the first two years, Government of Ghana subven
tions/grants, USAID and FAO grants and short-term borrowingsi.e. bank overdrafts and supplier credits. A statement of
sources and uses of funds (Appendix V) has been prepared to
show the extent to which the company has used these funds.
6.23 Our study of revenues placed emphasis on the generation of
income through trading activities; and having reviewed the
expenditure component above, we concentrated on the sales ofseeds with particular reference to sale prices and purchase
prices (Appendix IV) and their relationship to seed inventories
held over the periods. These revealed the fact that in 1984,
large quantities of maize were purchased at a price of ¢5,000
per maxi bag the majority of which were downgraded due to lack
of adequate storage facilities and the company's inability to
sell them. These had to be sold at a price of ¢951 per bag.
This trend appears to have been carried over into 1985
affecting rice and groundnuts as well, with management seeminglynot having any control over the problem. (Appendix IV).
6.24
6.25
25
Secondly, it also came to light that seeds produced on the
company's Foundation Seed Farms have been included in closing
inventories at the prices the company purchased its seeds
from the licensed seed growers. There has been no attempt
to determine the cost of production of the Foundation Seed
Farms in orde~ to ensure appropriate adjustments to their
operation cost buildup. This situation has been attributed
to the non-existence of a cost accounting system. Although
the solution to the problem had been identified by the
company, it is apparent that the accounting staff were not
capable of instituting and operating the system.
In conclusion, it is our opinion that control of expenditure
and revenue was woefully inadequate. Seed purchases appear
to be made whether or not there is a market for them. An
assessment of the seed growing techniques is required to
determine the standard cost and expected output per acre/
hectare of a Foundation Seed Farm.
SECTION VII
26
_ UTILIZATION OF FINANCIAL REPORTS BY MANAGEMENTAND QUALITY OF RELATED MANAGEMENT DECISION ANDCAPABILITIES
7.1 As stated elsewhere in this report the finance function itself
did not produce any meaningful results for use by management.
We are not in a position to state whether this state of affairs
was due to lack of direction at senior management level or
simply that the accounts department staff were not able to
cope with their work. For example, there were several errors
in the initial 1984 trial balance presented to us for our
review:
7.2 a) This 1984 trial balance was actually out of balance by
as much as ¢13,S43,790 initially. This was apparently
subsequently corrected.
b) Furniture and equipment account was debited with ¢183,900
and the same amount credited to staff advances account.
We understand that this was because cash was advanced to
staff members to buy assets on behalf of the company.
c) There was a sales suspense account in the general ledger
but was totally omitted from the trial balance.
d) Provision for depreciation per trial balance was different
from the general ledger balance by about ¢1 million.
Also the inventory figure differed by ¢600,OOO.
7.3 Certain cash accounts maintained as current accounts were
overdrawn and shown as credit balances. Bolgatanga had a
cash deficit balance of ¢73,671, Kumasi ¢248,790 and Ho ¢9,144.
We could not obtain any satisfactory explanation as to why these
accounts showed negative balances. From the above it can be
seen. that any figures submitted to management would be misleading
and at best unreliable.
27
7.4 From our enqu~r~es we found that any attempt to establish a
system of control over geographic Areas or to establish a
costing system was always defeated by the staff refusing to
co-operate. This reveals the main weakness in management
control; weak central authority, which in turn means
inability to enforce such changes. Management is mainly
in the hands of agronomists who were civil servants before
the incorporation of the company and who are unable to fully
appreciate the necessity for establishing controls over
assets, expenditure and income. We can safely state however
that the introduction of a performance related bonus paid to
staff of GSC will go a long way in motivating management.
PIOIT WORK ORDER
BACKGROUND
28 APPENDIX I
PIOIT No. 642-0102-3-10043
The Ghana Seed Company has been a USAID supported project for 6 years.The primary purpose of the company is to multiply seeds so that a varietyand quantity of seeds are available on a commercial basis to farmersthroughout Ghana. USAID has supported this project by providing humanand material resources through a contract with Experience Incorporated.The PACD for USAID support is current~y scheduled for September 30, 1986,however the departure of technicians is scheduled to begin in December1985. There has been some interest expressed in the continued support ofthis project by private investors. This evaluation will therefore servemultiple purposes of determining the effective use of AID inputs andascertaining the. viability of the GSC as a private sector developmentproject.
ARTICLE I - TITLES
Managed Inputs and Delivery of Agricultural Services, MIDAS II - Evaluation(Ghana Seed Company).
ARTICLE 11- OBJECTIVE
The objective of these services is to provide for a financial analysis ofthe Ghana Seed Company (GSC). The analysis is part of the evaluationof GSC.
The purpose of the financial assessment of GSC is to determine the Company'sfinancial viability, the extent to which it depends on outside resourcesand to review options for changes in its organizational structure.
ARTICLE 11- STATEMENT OF WORK
The services of a qualified chartered accountant is needed beginning olaOctober 21st for about 10 days to complete the following tasks at theGhana Seed Company:
1. Conduct a thorough review of Ghana Seed Company (GSC) expendituresand revenues, including GOG subsidies and external donor contributions.
2. Assess GSC's financial soundness, the appropriateness of itsfinancial procedures, its staff capability for managing its financialaffairs and the extent of its dependency on external resources(domestic and foreign) it has had to rely during the past fiveyears. Prepare a brief of the profit and loss situation.
3. Assess the utilization of GSC's financial reports by its Managemen~
the type and quality of decisions made as the result of reports,if any.
4. Recommend remedial measures that might be taken to improve GSC'sfinancial management system, 'if any, and reorganization that may benecessary to strengthen the company's management
29
GHANA SEED COMPANYPRESENT ORGANISATIONAL STRUCTURE
APPENDIX II
National. Seed
Co-.i.ttee
Gha.na Seed In- - - spection Unit
Board of Directors r
r -I
IManag~ - - - - - - - .JDirector I
!--
General ~er
Operations
1 I I I IProduction Quality Process~ Transport & Sales Area Internal Public
Manager Control Manager Hechaniza. Manager Managers AUditor RelationsManager tion Manager Officer
Ir I r I
Asst. Pro- Asst. Pro- Asst. Asstduction cess~ Quality SalesManager Manager Control Manager
Manager
Adainistratiy
ManagerChief
Accountant
Financial
Accountant
AreaAccountants
Head Office Accountsc1erks
30
~~!~!_~~~Q_~Q~fA~!_~!~!!~Q
ITEMS REQUIRED BY THE P.W. STUDY GROUP--------------------------------------
APPENDIX IlIa
1. All accounts schedules showing the make-up of the figures appearing inthe accounts for the years ended 30th June, 1980, 1981, 1982 and 31stDecember, 1982, 1983 and 1984.
2. Payrolls for the years ended 30th June, 1980, 1981 and 1982, !y/e31st December 1982 and the years ended 31st December 1983 and 1984.
3. Income tax computations prepared for the years since the Companywas incorporated.
4. Minutes of all meetings of the Board of Directors and the Members sincethe incorporation of the Company.
5. In our preliminary inspection we have found certain anomalies and weshould be obliged 'if you would let us have the answers to thefollowing questions:-
a) In the y/e ended 30th June, 1981, Loose Tools were transferredfrom Fixed Assets. To which account was the ¢540,672transferred.
b) In the y/e 30/6/81 an amount of ¢443,413 was shown in the fixedassets schedule but not relating to any specific asset. Thisamount was not credited to Capital Surplus, so to which accountwas it credited?
c) In the y/e 30/6/82 Loose Tools were re-introduced into theFixed Assets at a valuation of ¢1,008,296 but this was notcredited to Capital Surplus. To which account was it credited?
d) In the !y/e 31/12/82 Loose Tools were increased by anotherrevaluation of ¢47,887 but again this was not credited toCapital Surplus. To which account was it credited?
e) In the y/e 31/12/83 the depreciation b/fwd on Loose Toolswas removed from the financial statements. Pleaseexplain the reason for this treatment.
f.) Since the y/e 30/6/81 an item called "Assets In Progress"has appeared in the Fixed Asset schedule attached to thefinancial statements. Which assets does this figure represent? Let us have details please.
g) We note that budget figures are prepared by the Company butwe do not see any attempt to explain variancea in the figuresor any revised or supplementary figures for 1983, whendevaluation took place. Kindly explain the reasons for this.
6. We would welcome the opportunity to discuss several points in theaccounts with the Company's Auditor and we should be obliged if youcould arrange a meeting.
31 APPENDIX IIIb
7. We would like to examine your production records for the respectiveyears since the Company started to produce seeds, together with thesales records.
8. Stock records covering the years 1979 - 1984.
9. Branch returns.
You will appreciate that we have a limited time in which to complete our study,so we should be obliged if you could expedite the production of the abovelisted items.
------------------------------------_._ ... -.
APPENDIX IV- 32 -
GHANA SEED COI\~PANY LTI1ITED
SEED PURCHASES/SALES TRElID 1982 - 85
--.30/6/82 31/12/83 1 9 8 4 8 51 9 \
SEEDPURCHASES SALES PURCHA.SES SALES PURCHASES SALES PURCHASES SALES
KINDQ,TY. VALUE QTY. VALUE QTY. VALUE QTY. VALUE QTY. VALUE RTY· VALUE Q,TY. VALUE RTY. VALUE'.
MAIZE 7787 .3,893,500 7787 7,787,000 4316 3,237,000 4316 7,640,700 10,597 52,985Poo 1186.5 11,865,000 6762 M3,564,000 02.5 4, 242/bO'
(LOW GERM) - - - - - - - - - - 8911 8,472,400 - - e14 1,675;'00
18,508,700 11935 7,161,000 11935 11,935,000 4195 14, 682,!pO 3,962,700 5694i
RICE 26441 10,576,400 26441 777 h1,388,000 r936 5,808,OG}
(l.owGERM) - - - - - - - - - - - - - - ~914 1,722,f[jJ
698,500 1469 807,950 1469 1,175,200 3463 5,540,8l0 578 1,445,ocr 947I
GROUNDNUT 1270 508,000 1270 1,041,700 i 920 1,397..1)0.I
(LOW GERM) - - - - - - - - - t2680 3,752,000 - - I 27 . 5;!~OO- II
SORGIRJM 256 102,400 256 204,800 91 50,050 78 70,200 12 18,000 - - - - I - -I
COWPEAS - - - - - - - - 77 693,Om 77 1,078,000 111.16 555,800 1103.16 1,222,55Q
~ ? 52,449.75 ? 209,799 ? 981,222 ? 2,943,666 ? ~,151, 201.3: ? 3,453604 ? 1,243~335l75 ? 4,973,359
GRAND T01~ 15,132, 749.7S 27,408,799 12,237,222 23,764,766 75,070,501.33 34,028,704 ~7,792,8JJ. 75 21,047,052.I
BESTAVAILABLE COpy
--_....._----------------------
33 -
GHANA SEED COMPANY LIMITED
TRADING & PROFIT & LOSS ACCOUNTS FOR THEYEAR ENDED 31/12/84
Sales
Other Income
Less Cost of Sales
APPENDIX Va
34,028,705
3,300
34,032,005
46,032,058
12,000,053
Add General Administrative Expenses
Wages & Salaries
Rent
Vehicle Maintenance
Vehicle Running
Conference & Seminars
Printing & Stationery
General Expenses
General Repairs
Travelling & Transport
Equipment Repairs
Hire of Equipment
Advertisements
Insurance
Entertainments
Medical Expenses
Staff Training
Farm Research
Communications
Electricity & Water
Audit Fees
Bank Charges
Interest on Overdraft
Subscriptions
Staff Welfare
Professional Fees
Depreciation
Total Directors RemunerationStores Consumed
9,693,398
249!8421,512,988
3,535,083 .
171,389
388,738
164,118·
118,506
1,579,193
257,069
126,500
87,762
5,000
173,338
346,136
24,735
12,515
4,893
86,500
80,000
270,566
3,408,500
10,063
10,140
8,000
4,809,425
149,804 27,284,251
NET LOSS Before Tax 39,284,304
- 34 -
GHANA SEED COMPANY LIMITED
ANNUAL ESTIMATES
APPENDIX Vb
1982 1983 1984 1985
SAL E S ¢ 27,001,000 28,173,200 134,644,000 77,097,722
Less Expenditure
Seed Purchases 11,299,260 12,122,300 126,100,000 17.,500,000Sacks Tag & Twine 1,642,920 880,000 4,496,000 2,186,580Chemicals 1,860,170 710,000 1,538,300 1,526,610Salaries & Wages 4,502,000 5,750,000 13,410,000 17,507,760Vehicle. Repairs 1,180,000 990,000 1,081,000 1,993,600Vehicle Running 1,092,000 1,510,000 3,985,900 4,147,600Travelling & Transport 615,000 980,000 1,106,320 2,676,000General Repairs 76,100 190,000 106,470 240,100General Expenses 53,600 40,000 211,610 207,000Machinery Repairs 128,000 167,000 303,760 620,000Machinery Running 150,000 80,000 129,650 81,400Electricity & Water 16,500 30,000 50,690 133,800Insurance - - - 1,447,000Stores Purchases 1,046,400 550,000 1,054,300 346,900Printing & Stationery 716,000 610,000 486,280 609,800Carriage & Carting 702,000 480,000 280,150 -Entertainments 46,600 65,000 74,140 244,700Rent 281,200 250,000 201,450 362,700Bank Charges 60,900 180,000 807,800 810,000Bank Interest - - 2,300,000 3,239,300Conferences & Meetings 66,000 90,000 48,100 307,900Staff ·Training 1,500 10,000 1,134,850 65,000Advertisements 135,000 195,000 ·103,450 123,500Medical Expenses 34,000 180,000 202,4:l0 494,300Communications 11~000 18,000 3,400 10,800Farm Research 47,000 45,000 30,850 42,200Technical Support - 85,000 80,000 44,100Professional Charges 45,000 70,000 155,000 80,000Subscriptions & Renewals - - 20,390 46,700Commis 5 ion l? a y a b 1e - 60,000 279,930 -Hire of Machinery 35,000 200,000 88,350 369,700Depreciation _. 1,425,000 1,273,230 3,510,300Directors' Allowances 13,920 18,000 - -Total 25,857;070 27,980,300 160,143,800 60,975,350Add Opening Stocks 8,000,000 7,250,000 9,250,000 116,109,000
Gross Total 33,857,070 35,230,300 169,393,800 177,075,350Less Closing Stocks 7,950,000 9,250,090 116,100,000 105,550,250
Net Cost· 25,907,070 25,980,300 53,293,800 71,525,100
Net Profit 1,093,930 2,192,900 81,350,200 5,572,622
35 APPENDIX Vc\.~\
- r··GHANA SEED COMPANY LIMITED
SUMMARY OF THE PROFIT AND LOSS STATEMENtS FOR THE PERIOD1ST JULY 1979 TO 31ST DECEMBER, 1984
Year to Year to Year to ~ Year to Year to Year to30/6/80 % 30/6/81 % 30/6/82 % 31/12/82 % 31/12/83 % 31/12/84 %
(tOOO ¢OOO ~OOO ¢OOO ¢OOO (tOOO
TURNOVER 4,984 100 12,811 100 27,409 100 3,806 100 23,726 100 34,032 100DIRECT COSTS 2,360 47 7,225 56 17,337 63 632 17 18,097 76 '46,428 136LABOUR 2,247 45 3,442 27 5,723 21 3,082 81 7,945 34 10,004 30TRAVELLING AND
TRANSPORT 311 6 1,487 12 2,762 10 1,585 42 4,753 20 6,627 19FINANCE 21 121 1 181 1 94 n 788 3 3,679 11L
ADMINISTRATIONCOSTS 271 6 456 3 1,151 4 561 15 1,346 6 1,709 5
TOTAL COSTS 5,210 12,731 27,154 5,954 32,929 68,327
NET PROFIT/(LOSS) (226) (4 ) 80 1 255 1 (2,148) (56) (9,203) (39) (34,475) (101)
DEPRECIATION 691 5 990 3 543 14 3,177 13 4,809 14
~ET PROFIT/(LOSS)FOR THE PERIOD (226) (4 ) (611) (5) (735) (3 ) (2,691) (70) (12,380) (52) (39,284) (115)
NOTE: 1. Depreciation and loose tools written-off have been ignored in arriving at the above figures
2.(a) Ghana Government subventions in the amount of ¢23.810.238. in respect of buildings and farm machinerynot in the company's books at December 31, 1984 has been included in fixed assets and capital surplus.
(b) Also included in fixed assets is an amount of ¢3.037.236 being USAID grant in 1981. in respect of theprocessing plant.
Neither assets were in use by December 31. 1984
- 37 -GHANA SEED COMPANY LIMITED
STATEMENT OF SOURCES AND USES OF FUNDS
APPENDIX Vlb
P ,E RIO D END E D
30/6/80 30/6/81 30/6/82 31/12/82 31/12/83 31/12/84 TOT A L¢ ¢ ¢ ¢ ~ ¢ ¢
SOU R C E S
GHANA GOVERNMENT 18,829,576 13,717,903 16,429,757 1,247,500 - *26,301,808 76,526,544USAID - 3,037,236 - - 13,667,958 9,346,295 26,051,489FAO - - - - - 460,680 460,680
SHORT-TERM BORROWING
PAYABLES 236,470 585,749 (694,236) 275,922 6,432,081 1,200,525 8,036,511BANK - - - - 36,281,576 661,088 36,942,664PROFIT FOR PERIOD - 182,222 254,644 - - .' - 436,866
19,066,046 17,523,110 15,990,165 1,523,422 56,331,615 37,970,396 148,454,754
USES
FIXED ASSETS 7,639,850 4,456,922 2,642,765 864,383 14,384,513 28,988,522 58,976,955INVENTORIES 1,563,772 7,614,401 (3,018,127) 8,043,380 39,580,259 (23,495,056) 30,288,629RECEIVABLES 908,642 3,510,779 2,664,457 (2,834,830) 527,699 5,963,889 10,740,636CASH AND BANK 8,727,845 1,941,008 13,701,070 (6,969,290) (7, 4:n, 997) ( 7,961,439) 2,007,197
LOSS FOR PERIOD 225,937 - ,- 2,419,779 9,321,141 34,474,480 46,441,337
19,066,046 17,523,110 , 15,990,165 1,523,442 56,381,615 37,970,396 148,454,754
* INCLUDES AN AMOUNT OF ¢23~810,238 NOT IN COMPANY'S BOOKS IN RESPECT OF - BUILDINGS, PLANT AND MACHINERY
38
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